SUPREME COURT OF Petition for Review.pdf · most qualified roofers. (RP 1529) In June 2005, Parkside Church hired Gregg Roofing to install a new roof and repair dry rot at its church

SUPREME COURT OF THE STATE OF WASHINGTON

No. 42940-3

COURT OF APPEALS, DIVISION II OF THE STATE OF WASHINGTON

GREGG ROOFING, INC., -<

~ l \! ~ Petitioner, fi ~: \f rm ~ c '1014 vs. . ..

CL£RK0fTH£SU~fiE\. JL OF ENUMCLAW INSURANCE COMP~, -., ,::::-sTATE OF WA;Jn

Respondent.

APPEAL FROM THE SUPERIOR COURT FOR CLARK COUNTY

THE HONORABLE DANIEL STAHNKE

PETITION FOR REVIEW

SMITH GOODFRIEND, P.S.

By: Howard M. Goodfriend WSBA No. 14355

Ian C. Cairns WSBA No. 43210

1619 8th Avenue North Seattle, WA 98109 (206) 624-0974

BENNETT, BIGELOW & LEEDOM, P.S.

By: William J. Leedom WSBA No. 2321

1700 7th Ave, Ste 1900 Seattle, WA 98101 (206) 622-5511

Attorneys for Petitioner

TABLE OF CONTENTS

A. Identity Of Petitioner .................................................... !

B. Court Of Appeals Decision ........................................... 1

C. Issues Presented For Review ........................................ 1

D. Statement Of The Case .. : ............................................. 2

1. Mutual of Enumclaw's adjuster fired Gregg Roofing from a prominent project in order to receive kickbacks from another contractor, which then turned Gregg Roofing's project into a community eyesore ........................................... 2

2. A jury awarded Gregg Roofing $1.5 million on its tortious interference counterclaim against MOE. .............................. 3

3. The Court of Appeals reversed, holding that because Gregg Roofing failed to "quantify" its damages for reputational loss, the evidence was insufficient to support the jury's verdict ................................. 5

E. Argument Why Review Should Be Granted ................ 6

1. In holding that a business can recover only "quantifiable" damages for injury to reputation, the Court of Appeals' published decision conflicts with Fisons. (RAP 13-4(b)(1)) ............................................... 6

2. The Court of Appeals' published decision fails to recognize the jury's constitutional role to determine damages and creates an irrational distinction that violates equal protection. (RAP 13-4(b)(3), (4)) .................... 12

1

•

F. Conclusion .................................................................. 16

11

' '

TABLE OF AUTHORITIES

STATE CASES

Associated Grocers, Inc. v. State, 114 Wn.2d 182, 787 P.2d 22 (1990), cert. denied, 498 u.s. 1023 (1991) .......................................................................... 15

Brundridge v. Fluor Fed. Servs., Inc., 164 Wn.2d 432, 191 P.3d 879 (2008) ................................................ 10

Bunch v. King County Dep't. of Youth Services, 155 Wn.2d 165, 116 P.3d 381 (2005) ........................................... 10

Coffman v. Spokane Chronicle Pub. Co., 65 Wash. 1, 117 P. 596 (1911) ............................................................. 9

Dacres v. Oregon Ry. & Nav. Co., 1 Wash. 525, 20 P. 601 (1889) .......................................................................... 13

James v. Robeck, 79 Wn.2d 864,490 P.2d 878 (1971) ........................................................................................... 13

Lewis River Golf, Inc. v. O.M. Scott & Sons, 120 Wn.2d 712, 845 P.2d 987 (1993) .......................................... 10

Maison de France, Ltd. v. Mais Oui!, Inc., 126 Wn. App. 34, 108 P .3d 787 (2005) .............................................. 9

Mut. of Enumclaw Ins. Co. v. Gregg Roofing, Inc.,_ Wn. App. _, 315 P.3d 1143 (2013) ................................. 1

Schroeder v. Weighall, _ Wn. 2d. _, _ P.3d _, 2014 WL 172665 (2014) ........................................................ 14

Seidell v. Taylor, 86 Wash. 645, 151 P. 41 (1915) ............................................................................................ 9

Sofie v. Fibreboard Corp., 112 Wn.2d 636, 771 P.2d 711, amended, 780 P.2d 260 (1989) ................................... 13

lll

Vern Sims Ford, Inc. v. Hagel, 42 Wn. App. 675, 713 P.2d 736, rev. denied, 105 Wn.2d 1016 (1986) ................................................................................... 9

Washburn v. Beatt Equip. Co., 120 Wn.2d 246, 840 P.2d 86o (1992) ................................................................... 13

Washington State Physicians Ins. Exch. & Ass'n v. Fisons Corp., 122 Wn.2d 299, 858 P.2d 1054 (1993) ........................................................ 1, 6-8, 10-12

FEDERAL CASES

Experience Hendrix, L.L.C. v. Hendrixlicensing.com, Ltd., Co9-285Z, 2011 WL 4402775 (W.D. Wash. Sept. 21, 2011) ............................................................................................ 11

Grosjean v. Am. Press Co., 297 U.S. 233, 56 S. Ct. 444, 8o L. Ed. 66o (1936) ...................................................... 14

Hussey v. City of Portland, 64 F.3d 1260 (1995), cert. denied, 516 U.S. 1112 (1996) ................................... 14

STATUTES

RCWti. 23b ....................................................................................... 15

RCW ch. 25.05 .................................................................................. 15

RCW ch. 25.15 ................................................................................... 15

RULES AND REGULATIONS

RAP 13.4·································································· 1-2, 6, 9, 12-13, 16

CONSTITUTIONAL PROVISIONS

U.S. Const. amend. XIV,§ 1 .............................................................. 14

Wash. Const. Art. I,§ 12 ......................................................... 2, 14, 16

Wash. Const. Art. I, § 21 ............................................................. 13, 16

IV

A. Identity Of Petitioner.

Petitioner Gregg Roofing, Inc. was the defendant in the trial

court and the respondent in the Court of Appeals.

B. Court Of Appeals Decision.

Gregg Roofing seeks review of the Court of Appeals'

published decision of December 31, 2013, reversing the jury's

verdict in favor of Gregg Roofing on its counterclaim against

Mutual of Enumclaw Insurance Company for tortious interference

with a business relationship. Mut. of Enumclaw Ins. Co. v. Gregg

Roofing, Inc.,_ Wn. App. _, 315 P.3d 1143 (2013) (Appendix A).

C. Issues Presented For Review.

This Court held in Washington State Physicians Ins. Exch. &

Ass'n v. Fisons Corp., 122 Wn.2d 299, 332, 858 P.2d 1054 (1993)

that "[d]amages for loss of professional reputation are not the type

of damages which can be proved with mathematical certainty and

are usually best left as a question of fact for the jury."

1. Does the Court of Appeals' published decision

reversmg a jury's verdict on the ground that a business must

present evidence mathematically "quantifying" its reputational

damages conflict with Fisons? RAP 13-4(b)(1).

1

2. Did the Court of Appeals violate Wash. Const. Art. I,§

12, by holding that businesses, but not individuals, must prove

"quantifiable" loss to support a jury's verdict for damages to

business reputation? RAP 13-4(b)(3), (4).

D. Statement Of The Case.

This statement of facts is based on the Court of Appeals

decision and the testimony and evidence considered by the jury at

trial:

1. Mutual of Enumclaw's adjuster fired Gregg Roofing from a prominent project in order to receive kickbacks from another contractor, which then turned Gregg Roofing's project into a community eyesore.

Respondent Gregg Roofing, Inc., based in Camas,

Washington, has performed industrial, commercial, and residential

roofing in Camas and Clark County since 1944. (RP 1526-29) For

seventy years, Gregg Roofing has diligently built up its business

reputation, using the best materials and practices and hiring the

most qualified roofers. (RP 1529)

In June 2005, Parkside Church hired Gregg Roofing to

install a new roof and repair dry rot at its church in the middle of

Camas. (Op. ~ 2) Gregg Roofing had job signs at the church, as

well as its signature bright yellow trucks boldly labeled with the

2

Gregg Roofing name and logo, advertising to the small community

that Parkside Church was a Gregg Roofing job. (Op. ~ 9; RP 1622)

In August, an unexpected rain storm damaged the church's

interior when water leaked through the temporary covering

installed after the old roof was removed in preparation to install a

new one. (Op. ~ 2) Parkside Church filed a water damage claim

with its insurer, Mutual of Enumclaw Insurance Co. (MOE), which

assigned its employee Robert Lowrie to adjust the claim. (Op. ~ 2)

In order to receive financial gifts and "kickbacks" from Donald

Chill, the owner of Charles Prescott Restoration, Inc. (CPR), Lowrie

convinced Parkside Church's pastor to terminate Gregg Roofing and

hire CPR to repair the water damage and replace the church's roof.

(Op. ~ 3; RP 615-16) But CPR did not finish what had been

advertised in Camas as a Gregg Roofing job. (Op. ~ 9) Instead, CPR

placed a large tarp over the uncompleted roof, and left it there in

full view of the public for months. (Op. ~ 9; RP 1620-22)

2. A jury awarded Gregg Roofing $1.5 million on its tortious interference counterclaim against MOE.

MOE sued Gregg Roofing, claiming it had breached its

contract by causing the water damage to the church. (Op. ~ 4)

Gregg Roofing counterclaimed for tortious interference with its

3

' '

business relationship, because MOE's adjuster had convinced the

church to fire Gregg Roofing. (Op. ~ 4)

At trial, Gregg Roofing's President Allen Tiffany testified to

its diligent efforts to build its reputation, and to the harm caused by

MOE's unjustified termination of the Parkside Church contract.

(RP 1529, 1620-26) What had been widely advertised as a Gregg

Roofing job was completed with shoddy and unprofessional work,

leaving the roof uncompleted and covered only by a tarp for

months. (Op. ~ 9; RP 1620-26) As a result, previous Gregg Roofing

customers, including two other churches and an apartment

complex, chose not to seek bids from Gregg Roofing for new work.

(Op. ~ 8; RP 1622-23, 1626) Another potential customer that had

been referred to Gregg Roofing refused to hire the company

"because of the Parkside Church fiasco." (Op. ~ 8; RP 1646) Tiffany

described other roofing projects throughout the community on

which Gregg Roofing was not asked to bid because of MOE's

actions. (RP 1623)

The jury found 1) that Gregg Roofing had not breached its

contract with Parkside Church, and 2) that MOE intentionally

interfered with Gregg Roofing's contract with the church. (Op. ~ 13)

The jury in its special verdict awarded Gregg Roofing $1.5 million.

4

(Op. ~ 13; CP 309-10) The trial court that had presided over the

jury trial refused to set aside the damages award, denying MOE's

motion for judgment as a matter of law, a new trial, and remittitur.

(Op. ~ 14; CP 318-31, 568-69)

3· The Court of Appeals reversed, holding that because Gregg Roofing failed to "quantify" its damages for reputational loss, the evidence was insufficient to support the jury's verdict.

In a published decision, the Court of Appeals reversed the

jury's verdict and remanded for a new trial solely on the issue of

damages. (Op. ~~ 1, 51-54) The Court of Appeals held that "a

business must produce some evidence that quantifies its actual loss

from injury to reputation in order to support a verdict awarding

damages for that injury" (Op. ~ 16), and that Tiffany's testimony of

the reputational damages suffered by Gregg Roofing was

insufficient to support the jury's verdict because it failed "to

quantify the amount of damages." (Op. ~ 41) The Court of Appeals

distinguished "injury to an individual's professional reputation"

(Op. ~ 37) (emphasis in original) from injury to the professional

reputation of a business entity, holding that only damages to an

individual's professional reputation may be supported without "any

evidence that quantified the amount ofthose damages." (Op. ~ 32)

5

E. Argument Why Review Should Be Granted.

1. In holding that a business can recover only "quantifiable" damages for injury to reputation, the Court of Appeals' published decision conflicts with Fisons. (RAP 13-4(b)(l))

The Court of Appeals' published opinion conflicts with this

Court's decision in Washington State Physicians Ins. Exch. & Ass'n

v. Fisons Corp., 122 Wn.2d 299, 858 P.2d 1054 (1993), which held

that, because of the unique nature of reputational damages, a

plaintiff may recover reputational damages without evidence that

materially "quantifies" those damages. This Court should grant

review, reverse the Court of Appeals' decision, and reinstate the

jury's verdict. RAP 13-4(b)(1).

In Fisons, this Court affirmed the trial court's refusal to

order a new trial or remit the jury's award of over $1 million to a

physician for damages to his professional reputation caused by a

drug company's deceptive business practices. In holding that

damage to professional reputation constituted injury to "business

or property" recoverable under the Consumer Protection Act, the

Fisons Court distinguished reputational damages from general

damages for emotional harm, pain, and suffering. 122 Wn.2d at

317-18. Like "general" damages for emotional pain and suffering,

6

however, the Fisons Court recognized that "[d]amages for loss of

professional reputation are not the type of damages which can be

proved with mathematical certainty and are usually best left as a

question of fact for the jury." 122 Wn.2d at 332. This Court

therefore affirmed the jury's award of damages based solely on the

physician's testimony that "he thought there was certainly a loss to

his reputation in the community" because of newspaper articles and

because "other physicians had been ignoring him." Fisons, 122 Wn.

2d at 331. In doing so, this Court relied upon the "narrow standard

of review and the deference accorded to both the jury's discretion,

and the trial court's refusal to overturn the award." Fisons, 122

Wn.2d at 332.

As the Court of Appeals acknowledged in this case, the

physician in Fisons "presented no evidence quantifying the amount

of damage to his reputation." (Op. ~ 30) The Court of Appeals

attempted to distinguish Fisons on the ground that this Court

affirmed the jury's verdict in Fisons because the plaintiff was an

individual who had suffered "personal harm." (Op. ~ 37: "Fisons

impliedly recognized[] injuring an individual's professional

reputation may involve a 'personal' type of harm, such as hurt

feelings, humiliation, embarrassment, and loss of self esteem ....

7

This type of personal harm goes beyond economic loss, and

necessarily is unquantifiable."; see also Op. ~ 32: physician could

recover for "how the injury to his reputation made him feel.") But

the physician in Fisons did not recover for "humiliation or

embarrassment," or for "the sting of being ignored by" his peers.

(Op. ~ 38) The physician recovered only for the harm inflicted on

his business reputation. Had the award not been for injury to the

physician's business reputation, he could not have recovered under

the CPA. Fisons, 122 Wn.2d at 318.

This Court in Fisons held that "the damages the jury awarded

for loss of reputation are compensable under the Consumer

Protection Act" because they were injury to "business or property,"

distinguishing the "personal" damages awarded for the physician's

mental pain and suffering that this Court held "are not

compensable under the CPA." 122 Wn.2d at 318. The Fisons Court

consequently affirmed a jury's verdict in excess of $1 million (in

1993 dollars) based solely on the physician's testimony to the

unquantified damages to his business reputation, not "personal

harm."

In affirming the jury's verdict, this Court in Fisons followed a

long line of cases recognizing that determining reputational

8

damages is the province of a jury. See Coffman v. Spokane

Chronicle Pub. Co., 65 Wash. 1, 10, 117 P. 596, 6oo (1911) ("There is

no exact measure of damages to be awarded in an action for libel. It

is within the especial province of the jury to determine and fix the

award."); Seidell v. Taylor, 86 Wash. 645, 648, 151 P. 41 (1915)

("the value of the good will cannot be measured thereby with any

great degree of exactness . . . in such case damages need not be

measured with any degree of nicety"). More recent cases confirm

that a business entity can recover reputational damages in a

defamation action without evidence "quantifying" that harm. See,

e.g., Maison de France, Ltd. v. Mais Oui!, Inc., 126 Wn. App. 34,

54, ~~ 43-44, 108 P.3d 787 (2005); Vern Sims Ford, Inc. v. Hagel,

42 Wn. App. 675, 680-83, 713 P.2d 736, rev. denied, 105 Wn.2d

1016 (1986) (both allowing business entities to recover "presumed

damages" to business reputation). The Court of Appeals' published

decision in this case also conflicts with these decisions. RAP

13-4Cb)(1), (2).

The Court of Appeals paid lip service to the proposition that

"[o]nce the [plaintiff] establishes the fact ofloss with certainty (by a

preponderance of the evidence) .... recovery will not be denied

because damages are difficult to ascertain." (Op. ~ 21, citing Lewis

9

River Golf, Inc. v. O.M. Scott & Sons, 120 Wn.2d 712, 717-18, 845

P.2d 987 (1993)). 1 But the Court of Appeals' holding that a business

entity must always provide "evidence regarding the amount" of

damages by quantifying its loss is not supported by the very

precedent it cited. (Op. ~ 22, citing Bunch v. King County Dep't. of

Youth Services, 155 Wn.2d 165, 180, 116 P.3d 381 (2005)) Citing

Fisons, this Court in Bunch merely reaffirmed the "narrow and

restrained" standard of appellate review of a jury's verdict

establishing the amount of damages, and as a consequence reversed

the Court of Appeals' remittitur of the jury's award based on the

jury's constitutional "duty to find the facts." 155 Wn.2d at 175, ~ 17.

Once the fact of injury is established, the amount of damages

is for the jury. Here, because Gregg Roofing established the fact of

loss with certainty, it was for the jury to quantify the damage to its

business reputation. See, e.g., Brundridge v. Fluor Fed. Servs.,

Inc., 164 Wn.2d 432, 454, ~ 41, 191 P.3d 879 (2008) ("courts are

reluctant to interfere with a jury's damage award when fairly made

because determination of damages is the duty of the jury";

1 As the Court of Appeals acknowledged, although addressing possible methods for quantifying a business's reputation, this Court in Lewis River, "did not address whether evidence quantifying the amount of damages was required to support a jury verdict for injury to reputation damages." (Op. ~ 28 (emphasis in original))

10

' . .

affirming $4.8 million judgment that included awards of front and

back pay) (internal quotation omitted). The Court of Appeals

recognized as much in this case, correctly refusing MOE's request

for judgment as a matter of law because "Gregg Roofing presented

some evidence of damages." (Op. ~ 43)

As the Court of Appeals acknowledged, no Washington court

has before required evidence quantifying the amount of damages to

support a jury's verdict for reputation damages. (Op. ~ 28) The

Court of Appeals then erroneously based its holding solely on an

unpublished federal district court decision, Experience Hendrix,

L.L.C. v. Hendrixlicensing.com, Ltd., Cog-285Z, 2011 WL 4402775

(W.D. Wash. Sept. 21, 2011), which distinguished Fisons because it

involved an individual plaintiff. 2011 WL 4402775 at* 4·

But the district court in Hendrix was not engaging m

appellate review. Instead, having presided over the trial it was in a

"favored position" to review the jury's verdict. Fisons, 122 Wn.2d at

329. Here, by contrast, the trial judge refused to overturn the jury's

verdict after reviewing the evidence from its "favored position" -

not a cold record on appeal. The Court of Appeals erred in failing to

give the appropriate deference due the trial court's determination

that the evidence supported the jury's award of reputational

11

damages - an error of constitutional proportions, as argued in the

next section.

The jury, which heard Tiffany's testimony and observed his

demeanor firsthand, was entitled to base its award of damages for

reputational injury to his company on his testimony, just as the jury

did in Fisons. 122 Wn.2d at 329 ("The determination of the amount

of damages, particularly in actions of this nature, is primarily and

peculiarly within the province of the jury.") (quotation omitted).

This Court should grant review and reverse the Court of Appeals'

decision because it conflicts with this Court's decision in Fisons.

RAP 13-4(b)(1).

2. The Court of Appeals' published decision fails to recognize the jury's constitutional role to determine damages and creates an irrational distinction that violates equal protection. (RAP 13.4(b)(3), (4))

The Court of Appeals' published decision violates Gregg

Roofing's constitutional right to have a jury determine its damages.

The Court of Appeals' decision also violates equal protection and

Washington's privileges and immunities clause by subjecting

businesses that recover JUry awards for reputational harm to

stricter appellate review than individuals. This Court should grant

12

..

review, reverse, and reinstate the jury's verdict. RAP 13-4(b)(3),

(4).

It was for the jury - not the Court of Appeals on review - to

determine the amount of Gregg Roofing's damages, based on the

undisputed evidence that MOE damaged its reputation. "The right

of trial by jury shall remain inviolate." Wash. Const. Art. I, § 21.

The right to a jury trial includes the right to have a jury determine

damages. Sofie v. Fibreboard Corp., 112 Wn.2d 636, 646, 771 P.2d

711 ("our constitution, in article 1, section 21, protects the jury's role

to determine damages"), amended, 780 P.2d 260 (1989);

Washburn v. Beatt Equip. Co., 120 Wn.2d 246, 267, 840 P.2d 86o

(1992) ("To the jury is consigned under the constitution the

ultimate power to weigh the evidence and determine the facts-and

the amount of damages in a particular case is an ultimate fact.")

(quoting James v. Robeck, 79 Wn.2d 864, 869, 490 P.2d 878

(1971). The constitutional right to have a jury determine damages

has protected businesses, as well as individuals, since Washington's

territorial days. Dacres v. Oregon Ry. & Nav. Co., 1 Wash. 525,

529, 20 P. 601 (1889) ("The territorial legislature has no power to

deprive any person or corporation of the right of trial by jury in a

common-law action") (emphasis added). The Court of Appeals'

13

decision violates Gregg Roofing's fundamental right to a trial by

JUry.

Because the right to jury trial is fundamental, the Court of

Appeals' newly created distinction between the reputational

damages available to an individual and those available to a business

entity creates a distinction that cannot be justified under the equal

protection clause or Washington's privileges and immunities clause.

U.S. Const. amend. XIV, § 1; Wash. Const. Art. I, § 12. The equal

protection clause and the privileges and immunities clause mandate

that a classification that impinges on fundamental rights serve a

compelling state interest. See Hussey v. City of Portland, 64 F.3d

1260, 1265-66 (1995), cert. denied, 516 U.S. 1112 (1996); Schroeder

v. Weighall, _ Wn. 2d. _, ~ 24, _ P.3d _, 2014 WL 172665

(2014) ("article I, section 12 analysis [is] substantially similar to

federal equal protection analysis") (internal quotation omitted). "A

corporation is a 'person' within the meaning of the equal protection

and due process of law clauses." Grosjean v. Am. Press Co., 297

U.S. 233, 244, 56 S. Ct. 444, 447, Bo L. Ed. 66o (1936). The Court

of Appeals' distinction between individuals and businesses seeking

reputational damages impinges on Gregg Roofing's fundamental

right to have a jury determine damages and serves no compelling

14

state interest. It cannot survive the strict scrutiny required by equal

protection and the privileges and immunity clause.

The distinction between business reputation and individual

professional reputation created by the Court of Appeals in this case

could not even satisfy rational basis scrutiny, because it establishes

a privilege for individual business owners not equally afforded to

business entities. See Associated Grocers, Inc. v. State, 114 Wn.2d

182, 188, 787 P.2d 22 (1990), cert. denied, 498 U.S. 1023 (1991).

The Court of Appeals' published decision would allow a jury to

award an individual reputational damages based on an assertion of

unquantifiable harm, but "a business must provide evidence of

some measurable loss." (Op. ~ 39) These distinct evidentiary

burdens, requiring more and different proof to support jury awards

for reputational damages to businesses and to individuals, are

irrational.

The Legislature encourages the formation of business

entities. See RCW ti. 23b (Washington Business Corporation Act);

RCW ch. 25.05 (Revised Uniform Partnership Act); RCW ch. 25.15

(Limited Liability Companies). Individuals who take advantage of

these statutory entities to provide goods and services to the public

have no less an interest in maintaining the entity's professional

15

reputation than do those operating businesses as a sole

proprietorship. There is no meaningful basis for the distinction

imposed by the Court of Appeals. The artificial distinction between

the business reputation of an individually owned business and that

of a closely held corporation raises issues of constitutional

importance under Art. I, § § 12, 21, and presents an issue of

substantial public interest that this Court should address. RAP

13-4Cb)(3), (4).

F. Conclusion.

This Court should grant review and reverse the Court of

Appeals' published decision.

Dated this 29th day of January, 2014.

SMITH GOODFRIEND, P.S.

By:~~ Howard M. Goodfriend

WSBA No. 14355 Ian C. Cairns

WSBA No. 43210

BENNETT, BIGELOW & LEEDOM, P.S.

By: ~ (::: 1-o.,-William J. Leedom

0

WSBA No. 2321

Attorneys for Petitioner

16

DECLARATION OF SERVICE

The undersigned declares under penalty of perjury, under

the laws of the State of Washington, that the following is true and

correct:

That on January 30, 2014, I arranged for service of the

foregoing Petition for Review, to the court and to the parties to this

action as follows:

Office of Clerk Facsimile Court of Appeals - Division II --

.1S_ Messenger 950 Broadway, Suite 300 U.S. Mail Tacoma, WA 98402 --

E-Mail --Brent Beecher Facsimile Hackett Beecher & Hart --

x__ Messenger 1601 Fifth Avenue, Suite 2200 U.S. Mail Seattle, WA 98101-1651 --

E-Mail --William J. Leedom Facsimile Bennett, Bigelow & Leedom PS --

__ Messenger 601 Union Street, Suite 1500 U.S. Mail Seattle, WA 98101 --

)( E-Mail

DATED at Seattle, Washington this 30th day of January,

2014.

'•:

v . -

-., '.,

West law

315 P.3d 1143 (Cite as: 315 P.3d 1143)

Court of Appeals of Washington, Division 2.

MUTUAL OF ENUMCLAW INSURANCE COMPANY, a Washington corporation, Appellant/

Cross Respondent, v.

GREGG ROOFING, INC. a Washington corporation, Respondent/Cross Appellant.

No. 42940-3-11. Dec. 31,2013.

Background: Insurer, as subrogee of insured church, brought action against roofing company, with which church had contracted for installation of a new roof, for breach of contract. Company brought counterclaims, including tortious interference with a business relationship. Following jury trial, the Superior Court, Clark County, Daniel Lee Stahnke, J., entered judgment in favor of company for $1.5 million. Insurer appealed.

Holdings: The Court of Appeals, Maxa, J., held that: (I) a person establishing tortious interference with a business relationship can recover damages for injury to reputation; (2) in order for a business to recover damages for injury to its reputation, it must produce some evidence of quantifiable, economic harm; (3) damages award was not supported by the evidence; ( 4) company presented sufficient evidence of its lost profits and consequential damages to support an award of some damages; (5) new trial on the issue of damages was warranted; and (6) trial court did not abuse its discretion by excluding evidence that owner of second roofing company had been convicted of fraud.

Reversed and remanded with instructions.

West Headnotes

Ill Appeal and Error 30 €:=893(1)

30 Appeal and Error 30XVI Review

30XVI(F) Trial De Novo 30k892 Trial De Novo

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30k893 Cases Triable m Appellate Court

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121 Damages 115 €:=40(3)

115 Damages 115111 Grounds and Subjects of Compensatory

Damages 115111(A) Direct or Remote, Contingent, or

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115k35 Pecuniary Losses 115k40 Loss of Profits

115k40(3) k. Interruption or destruction of business. Most Cited Cases

A person establishing tortious interference with a business relationship can recover damages for injury to reputation. Restatement (Second) of Torts § 774A.

131 Torts 379 €:=211

379 Torts 379111 Tortious Interference

379lll(B) Business or Contractual Relations 379lli(B)l In General

379k211 k. Business relations or economic advantage, in general. Most Cited Cases

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379 Torts 379111 Tortious Interference

3791II(B) Business or Contractual Relations 3 79III(B) 1 In General

3 79k212 k. Contracts. Most Cited

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315 P.3d 1143 (Cite as: 315 P.3d 1143)

Cases A party claiming tortious interference with a

business relationship must prove: (1) the existence of a valid contractual relationship of which the defendant has knowledge, (2) intentional interference with an improper motive or by improper means that causes breach or termination of the contractual relationship, and (3) resultant damage.

141 Damages 115 ~40(3)

115 Damages 115111 Grounds and Subjects of Compensatory

Damages 115111(A) Direct or Remote, Contingent, or

Prospective Consequences or Losses 115III(A) I In General

115k35 Pecuniary Losses 115k40 Loss of Profits

115k40(3) k. Interruption or destruction of business. Most Cited Cases

The party claiming tortious interference with a business relationship may recover all losses proximately caused by the interference.

151 Damages 115 ~184

115 Damages 1151X Evidence

115k 183 Weight and Sufficiency 115k 184 k. In general. Most Cited Cases

The fact that the amount of damages need not be proved with precision does not allow a claimant to present no evidence regarding the amount.

161 Damages 115 ~184

115 Damages 115IX Evidence

I 15k 183 Weight and Sufficiency 115k184 k. In general. Most Cited Cases

Although the precise amount of damages need not be shown with mathematical certainty, competent evidence in the record must support the claimed damages.

[7) Damages 115 ~163(1)


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Page 2

115k 163 Presumptions and Burden of Proof 115k 163( I) k. Necessity of proof as to

damages in general. Most Cited Cases

Damages 115 ~184

115 Damages I 15IX Evidence

115k183 Weight and Sufficiency 115k 184 k. In general. Most Cited Cases

A claimant has the burden of proof on the amount of damages, and must come forward with sufficient evidence to support a damages award.

181 Damages 115 ~184


115kl83 Weight and Sufficiency 115k 184 k. In general. Most Cited Cases

Evidence of damages is sufficient if it affords a reasonable basis for estimating loss and does not subject the trier of fact to mere speculation or conjecture.

[91 Appeal and Error 30 ~1004(1)


30XVI(I) Questions of Fact, Verdicts, and Findings

30XVI(I)2 Verdicts 30k I 004 Amount of Recovery

30k 1 004( I) k. In general. Most Cited Cases

Damages 115 ~208(1)

115 Damages I 15X Proceedings for Assessment

I 15k208 Questions for Jury 115k208( I) k. In general. Most Cited Cases


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315 P.3d 1143 (Cite as: 315 P.3d 1143)

The amount of damages generally is a question of fact; however, an appellate court can overturn an award of damages, if it is outside the range of substantial evidence in the record.

110) Damages 115 €=:>188(1)

115 Damages 1151X Evidence

115kl83 Weight and Sufficiency 115k 188 Loss of or Damage to Property

115k 188( I) k. Extent of damage m general. Most Cited Cases

In order for a business to recover damages for injury to its reputation, it must produce some evidence of quantifiable, economic harm, such as decreased income, diminished value of the business, or a reduction of the business's goodwill, but merely providing testimony that the business's reputation has been injured without evidence quantifying the amount of damages is insufficient for recovery. Restatement (Second) of Torts§ 774A.

I 11 I Damages 115 €=:>137

115 Damages 115VII Amount A warded

115YII(C) Injuries to Property I 15k 13 7 k. In general. Most Cited Cases

Award of $1.5 million to roofing company in action against client's insurer for tortious interference with a business relationship was not supported by the evidence, where the only evidence that roofing company presented regarding the amount of damage to its reputation was its answer to an interrogatory stating that it sought $10,000 in reputation damages, which was nothing more than a conclusory statement. Restatement (Second) of Torts § 774A.

1121 Appeal and Error 30 €=:>934(1)


30XVI(G) Presumptions

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Page 3

30k934 Judgment 30k934( I) k. In general. Most Cited

Cases In reviewing the grant or denial of a motion for

a judgment as a matter of law, Court of Appeals engages in the same inquiry as the trial court, admitting the truth of the non-moving party's evidence and all reasonable inferences that can be drawn from it. CR 59.

1131 Trial388 €=:>139.1(9)

388 Trial 388Yl Taking Case or Question from Jury

388VI(A) Questions of Law or of Fact in General

388kl39.1 Evidence 388kl39.1(5) Submission to or

Withdrawal from Jury 388k 139.1 (9) k. Substantial

evidence. Most Cited Cases A motion for judgment as a matter of law is

proper only when the court can find, as a matter of law, that there was no substantial evidence or reasonable inference to sustain a verdict for the non-moving party.

I 141 Trial388 €=:>139.1(15)

388 Trial 388Vl Taking Case or Question from Jury

388VI(A) Questions of Law or of Fact m General

388kl39.1 Evidence 388k139.1(5) Submission to or

Withdrawal from Jury 388k 139.1 ( 15) k. Sufficiency to

warrant recovery, or to establish cause of action or defense. Most Cited Cases

Roofing company presented sufficient evidence of its lost profits and consequential damages to support an award of some damages in its favor, and, thus, judgment as a matter of law was not the appropriate remedy for lack of evidence supporting $1.5 million jury verdict in its favor in action against client's insurer for tortious interference with


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315 P.3d 1143 (Cite as: 315 P.3d 1143)

a business relationship, where roofing company produced sufficient evidence of damages caused by insurer's interference with a contractual relationship to support a verdict in some amount, at a minimum, the evidence supported an award of $530 in lost profits, and, if the jury extrapolated damages from evidence of the value of the lost profits from similar jobs that roofing company allegedly lost, consequential damages would be in the range of $9,600. CR 50.

[151 New Trial275 €=:>162(1)

275 New Trial 275III Proceedings to Procure New Trial

275k 162 Remission or Reduction of Excess of Recovery

275kl62(1) k. In general. Most Cited Cases Trial court did not abuse its discretion by

declining to attempt a remittitur in action by roofing company against client's insurer for tortious interference with a business relationship in which the jury awarded $1.5 million, where the special verdict form did not identify the amounts and types of damages. West's RCWA 4.76.030.

1161 New Trial275 €=:>9

275 New Trial 2751 Nature and Scope of Remedy

275k9 k. New trial as to part of issues. Most Cited Cases

New trial on the issue of damages was warranted in action by roofing company against client's insurer for tortious interference with a business relationship, where roofing company's evidence was insufficient to support an award of damages for injury to its reputation, and insurer already had a full and fair opportunity to present evidence on scope of employment and liability for intentional interference with a business relationship. CR 59.

[171 Appeal and Error 30 €=:>977(1)

30 Appeal and Error 30XV1 Review

30XVI(H) Discretion of Lower Court 30k976 New Trial or Rehearing

30k977 In General

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Page 4

30k977( I) k. In general. Most Cited Cases

Court of Appeals reviews a trial court's decision on a motion for a new trial for abuse of discretion. CR 59.

1181 New Trial275 €=:>9

275 New Trial 2751 Nature and Scope of Remedy

275k9 k. New trial as to part of issues. Most Cited Cases

A new trial may be limited to certain issues where it clearly appears that the original issues were distinct and justice does not require submission of the entire case to the jury. CR 59.

[191 Appeal and Error 30 €=:>970(2)


30XVI(H) Discretion of Lower Court 30k970 Reception of Evidence

30k970(2) k. Rulings on admissibility of evidence in general. Most Cited Cases

Court of Appeals reviews a trial court's evidentiary rulings for abuse of discretion; therefore, Court will overturn the trial court's ruling on the admissibility of evidence only if its decision was manifestly unreasonable, exercised on untenable grounds, or based on untenable reasons.

1201 Appeal and Error 30 €=:>1050.1(6)


30XVI(J) Harmless Error 30XVI(J)l0 Admission ofEvidence

30k 1050 Prejudicial Effect in General 30k 1050.1 Evidence in General

30k I 050.1 (3) Particular Actions


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,

315 P.3d 1143 (Cite as: 315 P.3d 1143)

or Issues, Evidence Relating to 30kl050.1(6) k. Damages.

Most Cited Cases Any error in admission of evidence that

president of roofing company did not feel very well and was naturally upset by repeatedly viewing the uncompleted roofing work on client's roof after his company was terminated was not prejudicial and, thus, harmless in roofing company's action against client's insurer for tortious interference with a business relationship, where his responses were brief and lacked detail, and they were coupled with an explanation regarding the negative effect on the roofing company's business, which was relevant to show injury to the business's reputation.

[21) Appeal and Error 30 ~1026


30XVI(J) Harmless Error 30XVI(J)l In General

30k 1025 Prejudice to Rights of Party as Ground of Review

30k I 026 k. In general. Most Cited Cases

Appeal and Error 30 ~1047(1)


30XVI(J) Harmless Error 30XVI(J)8 Reception of Evidence

30kl047 Rulings as to Evidence m General

30k I 04 7(1) k. In general. Most Cited Cases

When a trial court makes an erroneous evidentiary ruling, the question on appeal becomes whether the error was prejudicial; error without prejudice is not grounds for reversal.

[22) Appeal and Error 30 ~1047(1)


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Page 5

30XVI(J) Harmless Error 30XVI(J)8 Reception of Evidence

30k I 04 7 Rulings as to Evidence in General

30kl047(1) k. In general. Most Cited Cases

An error in an evidentiary ruling will be considered not prejudicial and harmless unless it affects the outcome of the case.

[231 Appeal and Error 30 ~1051(1)


30XVI(J) Harmless Error 30XVI(J) I 0 Admission of Evidence

30k I 05 I Facts Otherwise Established 30k I 05 I (I) k. By other evidence in

general. Most Cited Cases Improper admission of evidence constitutes

harmless error if the evidence is cumulative or of only minor significance in reference to the evidence as a whole.

(24) Evidence 157 ~99

157 Evidence 157IV Admissibility in General

I 57JV(A) Facts in Issue and Relevant to Issues

157k99 k. Relevancy in general. Most Cited Cases

The threshold to admit relevant evidence is low; even minimally relevant evidence IS

admissible. ER 40 I, 402.

[25) Labor and Employment 23tH ~3095

23 I H Labor and Employment 231 HXVIII Rights and Liabilities as to Third

Parties 231 HXVIII(B) Acts of Employee

231 HXVIII(B)2 Actions 231 Hk3092 Evidence

231 Hk3095 k. Admissibility. Most Cited Cases



315 P.3d 1143 (Cite as: 315 P.3d 1143)

Evidence that owner of second roofing company, which replaced first roofing company that had contract to replace client's roof, had been convicted of fraud and evidence of his relationship with employee of client's insurer was relevant to the issue of whether insurer's employee was acting within the scope of his employment when he convinced the client to fire the first roofing company and hire the second in action by first roofing company against insurer for tortious interference with a business relationship. ER 40 I, 402.

126) Labor and Employment 23tH ~3045

231 H Labor and Employment 231HXVIII Rights and Liabilities as to Third


231 HXVIII(B) I In General 231 Hk3044 Scope of Employment

231 Hk3045 k. In general. Most Cited Cases

Labor and Employment 23tH ~3047

231 H Labor and Employment 231 HXVIII Rights and Liabilities as to Third


231 HXVIII(B)1 In General 23 I Hk3044 Scope of Employment

231 Hk3047 k. Departures m general. Most Cited Cases

A master is liable for the acts of a servant committed within the scope or course of his or her employment; however, if the servant steps aside from the master's business in order to effect some purpose of his own, the master is not liable.

1271 Labor and Employment 23tH ~3045

231 H Labor and Employment 231 HXVIII Rights and Liabilities as to Third


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231 HXVIII(B) I In General 23 I Hk3044 Scope of Employment

231 Hk3045 k. In general. Most Cited Cases

Labor and Employment 23tH ~3046(1)

231 H Labor and Employment 23 I HXVIII Rights and Liabilities as to Third

Parties 23 I HXVIII(B) Acts of Employee

23 I HXVIII(B) I In General 23 I Hk3044 Scope of Employment

231 Hk3046 Furtherance of Employer's Business

23 I Hk3046(1) k. In general. Most Cited Cases

The test for whether an employee is acting within the scope of his employment is whether the employee was, at the time, engaged in the performance of the duties required of him by his contract of employment, or by specific direction of his employer, or whether he was engaged at the time in the furtherance of the employer's interest.

1281 Evidence t57 ~146

I 57 Evidence I 57 IV Admissibility in General

157IV(D) Materiality 157k I 46 k. Tendency to mislead or

confuse. Most Cited Cases

Trial 388 ~56

388 Trial 3881V Reception of Evidence

388IV(A) Introduction, Offer, and Admission of Evidence in General

388k56 k. Cumulative evidence in general. Most Cited Cases

Trial court did not abuse its discretion by excluding evidence that owner of second roofing company, which replaced first roofing company that had contract to replace client's roof, had been convicted of fraud and evidence of his relationship



315 P.3d 1143 (Cite as: 315 P.3d 1143)

with employee of client's insurer in action by first roofing company against insurer for tortious interference with a business relationship, although the evidence was relevant to the issue of whether insurer's employee was acting within the scope of his employment when he convinced the client to fire the first roofing company and hire the second, where the relevance was substantially outweighed by the risk of confusing the jury with evidence of a third party's criminal conviction unrelated to any of the claims at issue, and the evidence was cumulative of other evidence of employee's misconduct. ER 403.

1291 Appeal and Error 30 €;=1058(1)


30XVI(J) Harmless Error 30XVI(J)ll Exclusion of Evidence

30k I 058 Same or Similar Evidence Otherwise Admitted

30k I 058( I) k. In general. Most Cited Cases

Exclusion of cumulative evidence is not reversible error.

1301 Appeal and Error 30 €;=1058(1)


30XVI(J) Harmless Error 30XVI(J) II Exclusion of Evidence

30kl058 Same or Similar Evidence Otherwise Admitted

30kl058(1) k. In general. Most Cited Cases

The evidence need not be identical to that which is admitted in order for it to be cumulative such that its admission is not reversible error; instead, harmless error, if error at all, results where evidence is excluded which is, in substance, the same as other evidence which is admitted.

Danny L. Hitt, Attorney at Law, Portland, OR, Brent William Beecher, Hackett Beecher & Hart,

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Seattle, W A, for Appellant/Cross-Respondent.

Howard Mark Goodfriend, Ian Christopher Cairns, Smith Goodfriend PS, William James Leedom, Bennett Bigelow Leedom PS, Seattle, W A, for Respondent/Cross-Appellant.

MAXA,J. ~ 1 Mutual of Enumclaw Insurance Co. (MOE)

appeals a $1.5 million jury verdict award on Gregg Roofing, Inc.'s claim for tortious interference with a business relationship. The evidence at trial indicated that Gregg Roofing sustained minimal lost profits and consequential damages, meaning that a large majority of the damages award must have related to injury to its reputation. MOE argues that Gregg Roofing failed to present any evidence to quantify the amount of injury to its reputation, and therefore that the trial court erred when it denied MOE's CR 50 motion for judgment as a matter of law and its alternative motions for a new trial or reduction of the verdict. We agree, and hold that Gregg Roofing's evidence regarding injury to its reputation was insufficient to support the jury verdict. We reverse and remand for a new trial on the damages issue only.

FACTS Claim Background

~ 2 In June 2005, Parkside Church in Camas hired Gregg Roofing to install a new roof on the church and to repair dry rot. In August, after Gregg Roofing had removed the roof in preparation to install a new one, an unexpected rain storm damaged the building's interior when water leaked through the temporary covering Gregg Roofing had installed. The church filed a water damage claim with its insurer, MOE, which assigned its employee Robert Lowrie as the adjuster for the claim.

~ 3 Lowrie met with the church's pastor and persuaded him to terminate Gregg Roofing's contract and instead to hire Charles Prescott Restoration, Inc. (CPR), owned by Donald Chill, to repair the water damage. The church hired CPR,


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315 P.3d 1143 (Cite as: 315 P.3d 1143)

fired Gregg Roofing, and did not allow Gregg Roofing to complete the remaining $5,301 on its $16,212 roof replacement contract. In exchange for being given the job, Chill gave Lowrie financial gifts and "kickbacks." Clerk's Papers (CP) at 135. CPR fraudulently performed excessive and unnecessary repairs for which it received insurance payments, which Lowrie authorized despite knowing that the repairs were unnecessary. MOE paid a total of $2,345,537.66 to repair the damage to the church, a significant portion of which it paid to CPR.

~ 4 MOE was subrogated to the church's rights and sued Gregg Roofing, alleging that Gregg Roofing had breached its contract by causing the damage to the church.FNJ Gregg Roofing asserted various counterclaims, including a claim for tortious interference with a business relationship based on Lowrie convincing the church to fire Gregg Roofing. Gregg Roofing alleged that MOE was liable for Lowrie's conduct because he was acting within the scope of his employment with MOE.

Pretrial Rulings ~ 5 In a separate lawsuit MOE also had sued

Chill and CPR for fraud, negligent misrepresentation, and violation of the Consumer Protection Act, chapter 19.86 RCW. The trial court originally consolidated MOE's case against Chill and CPR with its case against Gregg Roofing. However, Gregg Roofing successfully moved to sever the two cases before trial. Gregg Roofing and MOE subsequently filed summary judgment motions, which resulted in the dismissal of all claims and counterclaims except MOE's breach of contract claim and Gregg Roofing's tortious interference with a business relationship claim.

~ 6 During discovery, MOE propounded an interrogatory to Gregg Roofing asking for the amount of claimed damages and the method of calculation. Gregg Roofing's response was that damages to its business reputation were " 'at least $10,000.' " CP at 241. MOE also made a request

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for production for Gregg Roofing's tax returns, but Gregg Roofing failed to produce them until the week before trial. Allen Tiffany, Gregg Roofing's president, testified in his deposition that he could have retrieved the documents from his attic earlier but did not. Because Gregg Roofing failed to timely produce its tax returns and because MOE claimed that damages were speculative, MOE moved to exclude evidence of damage to Gregg Roofing's business reputation. The trial court denied the motion to exclude all evidence of damage to Gregg Roofing's business reputation, but granted MOE's motion to exclude evidence of lost profits except for the $5,301 remaining on the contract.

~ 7 When the trial court granted Gregg Roofing's motion to sever MOE's case against Chill and CPR from the Gregg Roofing case, it also granted Gregg Roofing's motion to exclude evidence or argument regarding any fraud. Before trial, Gregg Roofing again moved to exclude evidence of Chill's fraud conviction and evidence that he was in prison, arguing that the evidence was irrelevant and inadmissible under ER 403. The trial court granted the motion. At trial, MOE made an offer of proof for evidence relating to Chill's fraud conviction as well as testimony regarding the connection between Chill and Lowrie. The trial court denied the request to admit them based on its previous rulings.

Damages Evidence ~ 8 At trial, Gregg Roofing's only testimony

regarding damages came from Tiffany, its president. With regard to lost profits, Tiffany testified that Gregg Roofing was not allowed to finish the project and therefore was not paid the $5,301.07 remaining on the contract. He stated that Gregg Roofing expected a 10 percent profit on the Parkside Church contract. Therefore, the total lost profits on the amount the church failed to pay were approximately $530. With regard to consequential damages, Tiffany testified that after the church incident Gregg Roofing was not asked to bid on several other residential and commercial roofing



...

315P.3d1143 (Cite as: 315 P.3d 1143)

projects on which the company normally would have been expected to bid. He specifically mentioned two churches and a four-building apartment complex. Tiffany also testified that another contractor had recommended Gregg Roofing for a job, but that the project owner declined because of the "Parkside Church fiasco." Report of Proceedings (RP) at 1646. Gregg Roofing did not provide any evidence regarding the profits it may have lost because it did not bid on these projects or any other evidence regarding financial losses relating to MOE's conduct.

~ 9 Tiffany provided minimal testimony regarding the fact that Gregg Roofing had sustained injury to its reputation. He expressed his opinion that Gregg Roofing's business reputation had been injured. He explained that "everybody" knew that Gregg Roofing had started work on the church because its boldly-labeled yellow trucks had been there for two weeks before the flooding, and that the church's roof remained unfinished with plastic sheeting over the top of it for months. As noted above, Tiffany also mentioned not being asked to bid on several jobs, but admitted that "I don't know that I totally know how much work we missed and how much ... the word spread in a negative manner around the community." RP at 1626. Tiffany concluded, "I know it's hurt ... our reputation, and our name for doing quality work was damaged." RP at 1623.

~ 10 Tiffany also provided almost no testimony regarding the amount of damages caused by Gregg Roofing's injured reputation. Tiffany made only five statements at trial regarding injury to reputation damages, and in four of those statements admitted that Gregg Roofing had no documents or any other evidence regarding the amount of damages.

Q. ... [I]s there anything else in terms of reputational damage ... that you can tell the jury about that you're testifying today that arise out of this breach of the contract? ... A .... I don't know how you ever come up with a number like that, I

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just know ... we've been severely damaged in our local neighborhood as a result of this.

RP at 1625-26. Q .... So you're not putting any numbers, you're not bringing out any documents, you're just going to let the jury decide what that is.

A. That's correct.

RP at 1626. Q. There are no documents that support any claim of financial loss for damage to your reputation[,] correct?

A. That's correct. How do you put a number on that?

RP at 1667. Q .... And you didn't put a number on the damage to reputation today, did you?

A.No.

Q .... [A]re you asking [the jury] to use their own good judgment to figure out how much that's worth to your business?

A. I'm praying that.

RP at 1673.

~ 11 In the fifth statement, Tiffany was asked about Gregg Roofing's answer to the damages interrogatory, which stated that the amount of its reputation damages was at least $10,000. Tiffany acknowledged that this answer had been prepared by Gregg Roofing's lawyers. Tiffany testified that since 2009 he had observed additional damage to Gregg Roofing's reputation, but he did not quantify the amount.

~ 12 Tiffany also was asked how he felt about seeing the unrepaired roof when he drove past the church, to which he responded, "Not very good." RP at 1620. MOE objected, arguing, "There's no



,.I -·

315 P.3d 1143 (Cite as: 315 P.3d 1143)

claim for emotional distress damages." RP at 1620. The trial court overruled the objection and allowed Tiffany to continue. He stated, "[W]e knew that this was a very negative effect on our business and we were naturally very upset by it." RP at 1621.

Verdict and Post Trial Motions ~ 13 The jury found that Gregg Roofing did not

breach its contract with the church. On Gregg Roofing's counterclaim, the jury found that MOE tortiously interfered with Gregg Roofing's contract with the church through Lowrie as its agent, and that the interference was a proximate cause of Gregg Roofing's damages. The jury awarded Gregg Roofing $1.5 million in damages.

~ 14 MOE had moved at the close of Gregg Roofing's case for judgment as a matter of law under CR 50(a) because Gregg Roofing failed to show a quantifiable amount of damage to its business reputation, which the trial court had denied. After the jury returned its verdict, MOE renewed its motion for judgment as a matter of law under CR 50(b) and moved for a new trial under CR 59 or, as an alternative, reduction of the verdict under RCW 4.76.030. MOE argued that the damages were speculative because the jury did not receive any evidence concerning Gregg Roofing's annual profits, the business's value, or the value of any of the jobs on which the company was not asked to bid. The trial court denied the motions.

~ 15 MOE appeals the trial court's denial of its motion for judgment as a matter of law and its motion for a new trial or in the alternative, a reduction of the verdict. MOE also appeals the evidentiary rulings regarding Tiffany's testimony about his feelings about damage to the business and evidence of Chill's fraudulent conduct. Gregg Roofing cross appeals, arguing that the trial court erred in failing to give its proposed instruction 19 regarding recoverable damages for tortious interference with a business relationship.

ANALYSIS A. DAMAGES RECOVERABLE FOR INJURY

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Page 10

TO A CORPORATION'S REPUTATION ~ 16 The primary issue in this case is the type

of evidence required to support a damages award for injury to a business's reputation. MOE argues that a business must produce some evidence that quantifies its actual loss from injury to reputation in order to support a verdict awarding damages for that injury. Gregg Roofing responds that evidence that a business's reputation was harmed is sufficient to support a verdict for injury to reputation damages, even in the absence of any evidence quantifying those damages. We agree with MOE.

1. Standard of Review [I ][2] ~ 17 MOE filed post trial motions for

judgment as a matter of law under CR 50(a)(l), a new trial under CR 59(a), and reduction of the verdict as an alternative to a new trial under RCW 4.76.030. We cannot evaluate the trial court's rulings on these motions until we resolve the fundamental issue of what type of evidence a business must produce to recover damages for injury to reputation. This is an independent legal issue. We review legal issues de novo. Sunnyside Valley Irrigation Dist. v. Dickie, 149 Wash.2d 873, 880, 73 P.3d 369 (2003).

2. Recovery for Injury to Business Reputation [3 ][ 4] ~ 18 A party claiming tortious

interference with a business relationship must prove: "(I) the existence of a valid contractual relationship of which the defendant has knowledge, (2) intentional interference with an improper motive or by improper means that causes breach or termination of the contractual relationship, and (3) resultant damage." Elcon Canst., Inc. v. E. Wash. Univ., 174 Wash.2d 157, 168, 273 P.3d 965 (2012). If the trier of fact finds that these elements have been met, the party claiming tortious interference with a business relationship may recover all "losses" proximately caused by the interference. Sunland Investments, Inc. v. Graham, 54 Wash.App. 361,364,773 P.2d 873 (1989).

~ 19 No Washington court has addressed the types of damages available to a party claiming



315 P.3d 1143 (Cite as: 315 P.3d 1143)

tortious interference with a business relationship. However, two Washington cases have referenced the RESTATEMENT (SECOND) OF TORTS § 774A (I 965). See Malarkey Asphalt Co. v. Wyborney, 62 Wash.App. 495, 513 n. 4, 814 P.2d 1219, 821 P.2d 1235 (1991); Linear Contractors, Ltd. v. Hyskell, 39 Wash.App. 317, 324, 692 P.2d 903 (1984). RESTATEMENT section 774A provides:

( 1) One who is liable to another for interference with a contract or prospective contractual relation is liable for damages for

(a) the pecuniary loss of the benefits of the contract or the prospective relation;

(b) consequential losses for which the interference is a legal cause; and

(c) emotional distress or actual harm to reputation, if they are reasonably to be expected to result from the interference.

(Boldface omitted.)

~ 20 Both parties apparently agree that section 774A applies. We also agree and hold that a person establishing tortious interference with a business relationship can recover damages for injury to reputation.FNz See also Island Air, Inc. v. LaBar. 18 Wash.App. 129, 145, 566 P.2d 972 (1977) (generally stating that reputation damages are recoverable in appropriate cases for tortious interference with a business relationship).

3. Sufficiency of Damages Evidence ~ 21 It is well established that "damages must

be proved with reasonable certainty." Lewis River Golf, Inc. v. O.M. Scott & Sons, 120 Wash.2d 712, 717, 845 P.2d 987 (1993). But " 'the doctrine respecting the matter of certainty, properly applied, is concerned more with the fact of damage than with the extent or amount of damage.' " Lewis River Golf 120 Wash.2d at 717, 845 P.2d 987 (emphasis omitted) (quoting Gaasland Co. v. Hyak Lumber & Millwork, Inc., 42 Wash.2d 705, 712,

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257 P.2d 784 ( 1953)). In Lewis River Golf, our Supreme Court explained:

"[O]nce the [plaintiff] establishes the fact of loss with certainty (by a preponderance of the evidence), uncertainty regarding the amount of loss will not prevent recovery. Thus, a [plaintiff] will not be required to prove an exact amount of damages, and recovery will not be denied because damages are difficult to ascertain .... Generally, whether the [plaintiff] has proved his loss with sufficient certainty is a question of fact."

120 Wash.2d at 717-18, 845 P.2d 987 (fourth alteration in original) (emphasis omitted) (quoting Roy Anderson, INCIDENTAL AND CONSEQUENTIAL DAMAGES, 7 J.L. & Com. 327,395-96 (1987)).

[5][6][7][8] ~ 22 However, the fact that the amount of damages need not be proved with precision does not allow a claimant to present no evidence regarding the amount. See Bunch v. King County Dep't qj' Youth Servs., 155 Wash.2d 165, 180, 116 P.3d 381 (2005) ("there must be evidence upon which the award [of damages] is based"). Although the precise amount of damages need not be shown with mathematical certainty, "competent evidence in the record" must support the claimed damages. Fed. Signal Corp. v. Safety Factors, Inc., 125 Wash.2d 413, 443, 886 P.2d 172 (1994) (quoting Interlake Porsche & Audi, Inc. v. Bucholz, 45 Wash.App. 502, 510, 728 P.2d 597 (1986)). A claimant has the burden of proof on the amount of damages, and must come forward with sufficient evidence to support a damages award. O'Brien v. Larson, 11 Wash.App. 52, 54, 521 P.2d 228 (1974). " 'Evidence of damage is sufficient if it affords a reasonable basis for estimating loss and does not subject the trier of fact to mere speculation or conjecture.' " Clayton v. Wilson. 168 Wash.2d 57, 72, 227 P.3d 278 (2010) (quoting State v. Mark, 36 Wash.App. 428,434,675 P.2d 1250 (1984)).

[9] ~ 23 The amount of damages generally is a



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question of fact. Bunch, 155 Wash.2d at 179, 116 P.3d 381. However, an appellate court can overturn an award of damages if it is " 'outside the range of substantial evidence in the record.' " Bunch, 155 Wash.2d at 179, 116 P.3d 381 (quoting Bingaman v. Grays Harbor Cmty. Hasp., I 03 Wash.2d 831, 835, 699 P.2d 1230 ( 1985)).

4. Cases Involving Verdicts for Injury to Reputation ~ 24 Two Washington cases have addressed

jury verdicts awarding damages for injury to reputation: Lewis River Golf and Washington State Physicians Insurance Exchange & Ass 'n v. Fisons Corp., 122 Wash.2d 299, 858 P.2d I 054 (1993). Although the legal principles addressed in these cases are helpful, neither is dispositive here because of factual differences. However, an unpublished federal district court case applying Washington law- Experience Hendrix, LLC v. Hendrixlicensing. com, Ltd., 20 II WL 4402775 (W.O. Wash.20 II) -contains a discussion of reputation damages that is consistent with our decision.

a. Lewis River Golf ~ 25 In Lewis River Golf, a company that grew

sod sued its seed supplier after weeds appeared in the sod grown from the seed. 120 Wash.2d at 714, 845 P.2d 987. The sod company claimed that it suffered a loss on the sale of its sod business because of injury to its reputation or goodwill resulting from sale of the bad sod. Lewis River Golf, 120 Wash.2d at 715, 845 P.2d 987. The jury awarded damages for the loss the sod company suffered on the sale of its sod division, but the Court of Appeals reversed. Lewis River Golf 120 Wash.2d at 715, 845 P.2d 987.

~ 26 On appeal to our Supreme Court, the seed company conceded that the sale of the bad sod damaged the sod company's reputation, but argued that the amount of damage was based on speculation. Lewis River Golf, 120 Wash.2d at 718-19, 845 P.2d 987. Our Supreme Court first noted that as long as the fact of loss is shown, a

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plaintiff will not be required to prove the exact amount of damages. Lewis River Golf, 120 Wash.2d at 717-18, 845 P.2d 987. The court discussed the measure of certainty required for proving damage to a business's goodwill:

"With respect to loss of goodwill, proving damages with reasonable certainty should track the generally expansive recent history of lost profits. However, unlike lost profits, goodwill relates to the future and, thus, no actual profit base will exist for use at trial. Accordingly, the expert testimony of accountants and economists will prove invaluable to the aggrieved buyer in presenting his claim for loss of goodwill. Such testimony will generally be accepted by the courts in assessing goodwill claims."

Lewis River Golf, 120 Wash.2d at 718, 845 P.2d 987 (emphasis omitted) (quoting Anderson, 7 J.L. & Com. at 422). Summarizing these principles, the court held that "[d]amage to business reputation and loss of goodwill have to be proved with whatever definiteness and accuracy the facts permit, but no more." Lewis River Golf 120 Wash.2d at 719, 845 P.2d 987.

~ 27 The sod company presented evidence quantifying the amount of injury to its reputation: the testimony of an expert economist who estimated the sod company's loss on the sale of its sod division based on a review of the sod company's financial records. Lewis River Golf, 120 Wash.2d at 720, 845 P.2d 987. The court determined that the expert's opinions were not so speculative as to be inadmissible. Lewis River Golf, 120 Wash.2d at 719-20, 845 P.2d 987. The court noted that the testimony of accountants and economists generally will be accepted in projecting goodwill damages. Lewis River Golf, 120 Wash.2d at 722, 845 P.2d 987. The court indicated that the jury verdict was supported by this evidence, concluding that the Court of Appeals had invaded the province of the jury in reversing the verdict. Lewis River Golf 120 Wash.2d at 724-25, 845 P.2d 987.



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~ 28 Unlike here, the sod company in Lewis River Golf produced evidence quantifying the amount of damages caused by the injury to its reputation. 120 Wash.2d at 720-22, 845 P.2d 987. The court held that such evidence was sufficient to support a jury verdict based on that evidence. Lewis River Golf, 120 Wash.2d at 724-25, 845 P.2d 987. However, the court did not address whether evidence quantifying the amount of damages was required to support a jury verdict for injury to reputation damages.

b. Fisons ~ 29 In Fisons, a physician prescribed a drug

that caused permanent brain damage to a child patient. 122 Wash.2d at 307, 858 P.2d 1054. The child's parents sued the physician and the drug manufacturer, and the physician ultimately settled the lawsuit. Fisons, 122 Wash.2d at 307, 858 P.2d I 054. It later was determined that the drug company knew of the risks associated with prescribing the drug to children but did not warn physicians of those risks or discontinue production of the drug. Fisons, 122 Wash.2d at 307-08, 858 P.2d I 054. The physician asserted products liability, Consumer Protection Act, and common law fraud claims against the drug company. Fisons, 122 Wash.2d at 309, 858 P.2d 1054.

~ 30 At trial, the physician apparently presented no evidence quantifying the amount of damage to his reputation. Instead, he testified that in his opinion he had suffered a loss to his reputation in the community, that other physicians were ignoring him, and that he no longer enjoyed his work. Fisons, I 22 Wash.2d at 331, 858 P.2d I 054. He also presented evidence that articles in several newspapers had reported that his conduct had caused the child's injury. Fisons, 122 Wash.2d at 331-32, 858 P.2d 1054. Based on this evidence, a jury awarded over $1 million in damages for injury to the physician's professional reputation. Fisons, 122 Wash.2d at 309, 858 P.2d I 054.

~ 31 Our Supreme Court held that the trial court did not err in refusing to grant a new trial or

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reduce the damage award based on the size of the verdict. Fisons, 122 Wash.2d at 329, 858 P.2d I 054. In addressing whether the verdict was outside the range of substantial evidence in the record, the court stated, "The rule in Washington on the question of sufficiency of the evidence to prove damages is that: '[t]he fact of loss must be established with sufficient certainty to provide a reasonable basis for estimating that loss.' " Fisons, 122 Wash.2d at 331, 858 P.2d 1054 (alteration in original) (internal quotation marks omitted) (quoting Haner v. Quincy Farm Chems., Inc., 97 Wash.2d 753, 757, 649 P.2d 828 (1982)). The court held that the evidence presented in support of injury to the physician's reputation-the physician's testimony and the newspaper articles-was sufficient to sustain the jury's award for damages to the physician's reputation. Fisons, 122 Wash.2d at 332, 858 P.2d I 054. The court concluded, "Damages for loss of professional reputation are not the type of damages which can be proved with mathematical certainty and are usually best left as a question of fact for the jury." Fisons, 122 Wash.2d at 332, 858 P.2d I 054.

~ 32 Fisons established that an individual physician can recover damages for injury to reputation based on his opinion that he had suffered such damages and how the injury to his reputation made him feel. Based on those facts, the court did not require the physician to produce any evidence that quantified the amount of those damages.FNJ However, the court did not address the issue in this case-the type of evidence a business must produce to support a damages verdict for injury to its reputation.

c. Experience Hendrix ~ 33 In Experience Hendrix, the court ruled

that proof of economic damages is required to support a damages award for harm to a business's reputation. 2011 WL 4402775, at *5--6. Experience Hendrix sued under the Washington Consumer Protection Act for infringement of Jimi Hendrixrelated trademarks. Experience Hendrix, 2011 WL


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4402775, at * 1. The jury's special verdict form had separate lines for injury to reputation and injury to goodwill, and during deliberations the jury asked the trial court to define those terms. Experience Hendrix. 2011 WL 4402775, at *2. The trial court explained that "reputation and goodwill are essentially the same thing and are collectively a business's reputation, patronage, and other intangible assets that are considered when appra1smg a business." Experience Hendrix, 2011 WL 4402775, at *2 (internal quotation marks omitted). The jury awarded $750,000 for injury to the company's reputation and $300,000 for injury to goodwill. Experience Hendrix, 2011 WL 4402775, at *2.

~ 34 The court granted the defendant's motion for judgment as a matter of Jaw, concluding that the evidence did not support the jury's awards for injury to reputation and goodwill and the awards were based on speculation. Experience Hendrix, 2011 WL 4402775, at *6. The court initially concluded that the definition of reputation and goodwill it provided to the jury was a correct statement of the Jaw because "Washington courts have consistently defined reputation as merely one component of a business's goodwill." Experience Hendrix, 2011 WL 4402775, at *5. The court cited In re Marriage of Zeigler, 69 Wash.App. 602, 607, 849 P.2d 695 (1993) ("Goodwill represents the expectation of continued patronage based upon such intangibles as location, trade name, reputation, organization and established clients." (emphasis added)) and WAC 296-17-31030(3) (defining "goodwill" as "the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor" (emphasis added)). The court further held that "business entities do not have reputations per se, but rather have goodwill." Experience Hendrix, 2011 WL 4402775, at *5. The court concluded that the jury's award of different amounts for injury to reputation and injury to goodwill was inconsistent with the Jaw and with the court's instructions. Experience Hendrix, 2011 WL 4402775, at *5.

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~ 35 The court also addressed whether the damage awards were supported by substantial evidence. In holding that the damages were "based entirely on speculation," the court reasoned:

The jury was provided no evidence from which it could determine the diminution in value, if any, of plaintiffs' goodwill as a result of defendants' violation of the C[onsumer] P[rotection] A[ct]. Plaintiffs proffered no estimate, by way of expert testimony or otherwise, of the value of their goodwill either before or after defendants' wrongful conduct. See Stewart & Stevenson Servs., Inc. v. Pickard, 749 F.2d 635, 649 (lith Cir.l984) ("It is axiomatic that the measure of damage to business property, such as goodwill, is based on a measurement of the difference in value of the property before and after the injury."). Indeed, plaintiffs' counsel conceded during discussions concerning the related jury instructions that "[t]here's not a specific number in evidence." Tr. at 23:17-18 (docket no. !59).

Experience Hendrix, 2011 WL 4402775 at *5 (alteration in original). The court noted that Washington law provides five different methods for calculating the value of a business's goodwill, but that Experience Hendrix "presented no analytical framework for determining the worth of [its] goodwill, and [it] proffered no evidence from which the jury could have found that the value of [its] goodwill had been diminished in any amount." Experience Hendrix, 2011 WL 4402775, at *6.

~ 36 As in Experience Hendrix, Gregg Roofing offered no evidence or even an estimate regarding the amount of damage to its reputation. We agree with the court in Experience Hendrix that in the absence of such evidence, the reputation damages the jury awarded could only have been based on speculation. FN4

5. Evidence Required for a Business's Reputation Damages

[I 0] ~ 3 7 We conclude that in order for a business to recover damages for injury to its


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reputation, it must produce some evidence of quantifiable, economic harm. Fisons is distinguishable because it involved InJUry to an individual's professional reputation. With regard to reputation, individuals and businesses suffer different types of injury. As the court in Fi.wns impliedly recognized, mJunng an individual's professional reputation may involve a "personal" type of harm, such as hurt feelings, humiliation, embarrassment, and loss of self esteem. The court in Fisons emphasized that the physician's injury to his reputation resulted in other doctors ignoring him and diminished enjoyment of his medical practice. 122 Wash.2d at 331, 858 P.2d 1054. This type of personal harm goes beyond economic loss, and necessarily is unquantifiable. Accordingly, the court in Fisons properly held that the physician's evidence of harm to his feelings without any attempt to quantify the amount of damages was sufficient to sustain the jury verdict. 122 Wash.2d at 332, 858 P.2d 1054.

1 38 But businesses do not have feelings. Businesses cannot experience humiliation or embarrassment, and they cannot suffer the sting of being ignored by its peers like the physician in Fisons. Businesses have no "personal" interests that can be harmed. As a result, the only damages a business can recover for injury to its reputation are economic. If a business has not suffered any financial loss from diminished reputation, it has not been damaged. And by definition economic harm to a business is quantifiable and measureable.

1 39 Because injury to a business's reputation necessarily is quantifiable, we hold that in order to recover damages for that injury, a business must provide evidence of some measurable loss. Such loss includes decreased income, diminished value of the business as in Lewis River Golf, or a reduction of the business's goodwill as discussed in Experience Hendrix. But merely providing testimony that the business's reputation has been injured without evidence quantifying the amount of damages is insufficient for recovery. A business

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cannot recover unquantified "general" damages for injury to reputation.

6. Evidence of Gregg Roofing's Damages [II] 1 40 Gregg Roofing concedes that it did

not produce any evidence that quantified the injury to its reputation or that provided the jury with a reasonable basis to calculate reputation damages. The only evidence pertaining to injury to Gregg Roofing's business reputation was Tiffany's testimony that its reputation had been harmed and that it had not been asked to bid on certain jobs. Tiffany admitted that he had no evidence regarding the amount of damages. Specifically, he admitted that Gregg Roofing had no evidence to "support any claim of financial loss for damage to [its] reputation." RP at 1667. Gregg Roofing presented no evidence regarding lost income, diminished value of the business, or a decrease in goodwill.

1 41 The only evidence Gregg Roofing presented at trial regarding the amount of damage to its reputation was its answer to a 2009 interrogatory stating that it sought $10,000 in reputation damages. But this was nothing more than a conclusory statement prepared by Gregg Roofing's lawyers, unsupported by any actual evidence. At trial Tiffany did not even attempt to quantify the amount of damages.

1 42 Gregg Roofing's burden was to present some evidence of the amount of damages caused by the injury to its reputation. But Gregg Roofing admitted at trial that it had no such evidence. Merely "praying" that the jury will figure out the amount of damages without providing any supporting evidence is insufficient. RP at 1673. Accordingly, we hold that Gregg Roofing did not provide the jury with a reasonable basis for estimating its damages, and therefore the $1.5 million award must have been the result of speculation or conjecture.

B. REMEDY FOR INSUFFICIENT EVIDENCE 1 43 Because we hold that the evidence

regarding Gregg Roofing's injury to reputation was



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insufficient to support the jury's verdict, we must determine the proper remedy. MOE filed post. trial motions for judgment as a matter of law under CR 50(a) and alternative motions for a new trial under CR 59 or reduction of the verdict under RCW 4.76.030. We hold that judgment as a matter of law was inappropriate because Gregg Roofing presented some evidence of damages and decline to order a reduction of the jury verdict. We instead hold that a new trial on the issue of damages is the appropriate remedy.

1. Judgment as a Matter of Law-CR 50 ~ 44 CR 50( a)(!) allows judgment as a matter

of law if there is no basis for a jury's verdict. The rule provides:

If, during a trial by jury, a party has been fully heard with respect to an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find or have found for that party with respect to that issue, the court may grant a motion for judgment as a matter of law against the party on any claim, counterclaim, cross claim, or third party claim that cannot under the controlling law be maintained without a favorable finding on that issue.

CR 50(a)(1). If the trial court denies the motion under CR 50( a)( I) during trial at the close of the evidence, the moving party may renew the motion within 10 days after judgment is entered on the case. CR 50(b ). Here, MOE moved for judgment as a matter of law under both CR 50( a)( I) and CR 50(b).

[12][13] ~ 45 In reviewing the grant or denial of a motion for a judgment as a matter of law we engage in the same inquiry as the trial court, admitting the truth of the nonmoving party's evidence and all reasonable inferences that can be drawn from it. Faust v. Albertson, 167 Wash.2d 531, 537, 222 P.3d 1208 (2009). A motion for judgment as a matter of law is proper only when the court can find, as a matter of law, that there was no substantial evidence or reasonable inference to

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sustain a verdict for the nonmoving party. Guijosa v. Wal-Mart Stores, Inc., 144 Wash.2d 907, 915, 32 P.3d 250 (200 I).

[ 14] ~ 46 Here, judgment as a matter of law is not the appropriate remedy because Gregg Roofing produced evidence of damages caused by MOE's interference with a contractual relationship sufficient to support a verdict in some amount. At a minimum, the evidence supported an award of $530 in lost profits. Gregg Roofing also presented evidence that it had lost additional work as a result of the church incident. This evidence supported an inference that Gregg Roofing would have earned similar profits in these jobs as on the Parkside Church project. MOE notes that if the jury could extrapolate damages from evidence of the value of the church job, consequential damages would be in the range of $9,600. Accordingly, we hold that Gregg Roofing presented sufficient evidence of its lost profits and consequential damages to support an award of some damages in its favor.

~ 47 The jury was not asked to provide a special verdict allocating damages between lost profits, consequential damages, and injury to reputation. Because there was evidence supporting an award of some economic damages, there is no basis for finding that there was "no legally sufficient evidentiary basis" for a damages award of any kind as required for relief under CR 50(a)(l). Therefore, we hold that the trial court did not err when it denied MOE's motion for judgment as a matter of law.

2. Reduction ofthe Verdict [ 15] ~ 48 The trial court may reduce a jury's

damages award as an alternative to a new trial if the award is "so excessive ... as unmistakably to indicate that the amount thereof must have been the result of passion or prejudice" if the affected party consents to the reduction. RCW 4.76.030. We review a trial court's denial of a motion for remittitur or reduction of the verdict for abuse of discretion. Bunch, 155 Wash.2d at 176, 116 P.3d 381.



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~ 49 We also have the authority to reduce a jury's damages award under the doctrine of remittitur and under RCW 4.76.030 if the award is outside the range of substantial evidence in the record, shocks the conscience of the court, or appears to have been arrived at as the result of passion or prejudice. Bunch, 155 Wash.2d at 171-72, 116 P.3d 381. However, our Supreme Court has emphasized that appellate courts should rarely exercise this authority. Bunch, 155 Wash.2d at 175, 116 P.3d 381.

~ 50 Here, Gregg Roofing presented evidence of lost profits and consequential damages caused by MOE's conduct, which undoubtedly was reflected in some portion of the jury's verdict. Because the jury did not use a special verdict form identifying the amounts and types of damages, we would have difficulty separating the recoverable damages from the unrecoverable general reputation damages. We decline to attempt a remittitur based on the appellate record and hold that the trial court did not abuse its discretion when it also declined to attempt such calculations based on the record before it.

3. New Trial-CR 59(a) [16][17] ~51 We review a trial court's decision

on a motion for a new trial for abuse of discretion. Collins v. Clark County Fire Dist. No. 5, 155 Wash.App. 48, 81, 231 P.3d 1211 (2010). CR 59(a)(7) allows the trial court to vacate a jury's verdict and grant the moving party a new trial if the trial court finds that "there is no evidence or reasonable inference from the evidence to justify the verdict or the decision, or that it is contrary to law." Under CR 59(a)(7), a trial court abuses its discretion by denying a motion for a new trial if the verdict is contrary to the evidence. Palmer v. Jensen, 132 Wash.2d 193, 198, 937 P.2d 597 ( 1997). Because we hold that Gregg Roofing's evidence was insufficient to support an award of damages for injury to its reputation, we hold that the trial court abused its discretion in denying MOE's motion for a new trial. Accordingly, we reverse and remand for a new trial.

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4. Scope ofNew Trial ~ 52 Gregg Roofing argues that in the event a

new trial is ordered, we should limit the new trial to the issue of damages because the jury already has determined that MOE is liable for tortious interference with a business relationship. We agree.

[ 18] ~ 53 "A new trial may be limited to certain issues where it clearly appears that the original issues were distinct and justice does not require submission of the entire case to the jury." Mina v. Boise Cascade Corp., 104 Wash.2d 696, 707, 710 P.2d 184 (1985). In Mina, the court determined that reversal on a liability issue did not require retrial of damages when each party had the opportunity to present evidence on damages, the special verdict form contained separate questions concerning liability and damages, and neither party argued that the amount of damages was inappropriate. I 04 Wash.2d at 707-D8, 710 P.2d 184.

~ 54 Here, MOE already had a full and fair opportunity to present evidence on scope of employment and liability for intentional interference with a business relationship. The jury completed a special verdict form with separate findings on liability issues and damages. And MOE did not assign error to the jury's liability findings. Accordingly, we order that the new trial be limited to the issue of the amount of damages for MOE's interference with Gregg Roofing's business relationship.

C. EVIDENTIARY ISSUES [ 19] ~ 55 MOE also challenges two of the trial

court's evidentiary rulings. We review a trial court's evidentiary rulings for abuse of discretion. Cole v. Harvey/and, LLC, 163 Wash.App. 199, 213, 258 P.3d 70 (20 11 ). Therefore, we will overturn the trial court's ruling on the admissibility of evidence only if its decision was manifestly unreasonable, exercised on untenable grounds, or based on untenable reasons. Gorman v. Pierce County, 176 Wash.App. 63, 84, 307 P.3d 795 (20 13).

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[20] ~ 56 MOE argues that the trial court abused its discretion when it overruled MOE's objection to Tiffany's testimony regarding his feelings after repeatedly viewing the uncompleted roofing work on the church. On direct examination, when asked about how he felt about seeing the church with the unrepaired roof on a daily basis when driving through Camas, Tiffany responded, "Not very good" and "we were naturally very upset by it." RP at 1620, 1621. We hold that MOE cannot show that it was prejudiced by the introduction of this evidence and therefore any error in admitting the evidence was harmless.

[21 ][22][23] ~ 57 When a trial court makes an erroneous evidentiary ruling, the question on appeal becomes "whether the error was prejudicial, for error without prejudice is not grounds for reversal." Brown v. Spokane County Fire Prot. Dist. No. I. 100 Wash.2d 188, 196, 668 P.2d 571 ( 1983). An error will be considered not prejudicial and harmless unless it affects the outcome of the case. Brown, I 00 Wash.2d at 196, 668 P.2d 571. "[I]mproper admission of evidence constitutes harmless error if the evidence is cumulative or of only minor significance in reference to the evidence as a whole." Hoskins v. Reich. 142 Wash.App. 557, 570, 174 P.3d 1250 (2008).

~ 58 Here, even assuming the evidence of Tiffany's feelings was improperly admitted, his responses were brief and lacking detail. Moreover, his response that he was "upset" by seeing the unfinished roof was coupled with an explanation regarding the negative effect on Gregg Roofing's business, which was relevant to show injury to the business's reputation. RP at 1621. Accordingly, we hold that Gregg Roofing cannot show that it was prejudiced by the admission of testimony regarding Tiffany's feelings.

2. Evidence of Chill's Fraud ~ 59 MOE argues that the trial court abused its

discretion when it excluded evidence of Chill's fraud conviction and his relationship with Lowrie. It argues that this evidence was relevant to its

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defense that Lowrie was acting outside the scope of his employment at the time he caused the church to breach its contract with Gregg Roofing, and that the probative value of the evidence outweighed the danger of unfair prejudice. We disagree.

a. ER 401, 402, and 403 [24] ~ 60 Only relevant evidence is admissible.

ER 402. Evidence is relevant if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." ER 40 I. The threshold to admit relevant evidence is low; even minimally relevant evidence is admissible. Kappelman v. Lutz, 167 Wash.2d I, 9, 217 P.3d 286 (2009). However, under ER 403, relevant evidence "may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury."

[25][26][27] ~ 61 One issue at trial was whether Lowrie was acting within the scope of his employment with MOE when he convinced the church to fire Gregg Roofing. "A master is liable for the acts of a servant committed within the scope or course of his or her employment." Bratton v. Calkins, 73 Wash.App. 492, 498, 870 P.2d 981 ( 1994 ). However, if the servant "steps aside from the master's business in order to effect some purpose of his own, the master is not liable." Kuehn v. White, 24 Wash.App. 274, 277, 600 P.2d 679 ( 1979). The test is " 'whether the employee was, at the time, engaged in the performance of the duties required of him by his contract of employment, or by specific direction of his employer; or ... whether he was engaged at the time in the furtherance of the employer's interest.' " Dickinson v. Edwards, I 05 Wash.2d 457, 467, 716 P.2d 814 (1986) (emphasis omitted) (quoting Elder v. Cisco Constr. Co., 52 Wash.2d 241, 245, 324 P.2d 1082 (1958)). Therefore, the evidence of Chill's fraud conviction and his relationship with Lowrie was relevant to the scope of employment issue.

[28] ~ 62 But a trial court can exclude relevant


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evidence under ER 403. MOE argues that the evidence regarding Chill's fraudulent conduct and fraud conviction was highly probative because "the fact that an employee is engaged in defrauding his employer destroys vicarious liability under Washington law." Br. of Appellant at 46. MOE's argument is too broad. Neither the fact that a servant's predominant motive is to benefit himself or a third person nor the fact that the servant's actions were contrary to the master's policy necessarily absolves the master from liability. Robel v. Roundup Corp., 148 Wash.2d 35, 53-54, 59 P.3d 611 (2002); Smith v. Leber, 34 Wash.2d 611, 623, 209 P.2d 297 ( 1949); Car min v. Port of Seattle, 10 Wash.2d 139, 154, 116 P.2d 338 (1941).

~ 63 Moreover, the trial court's ruling did not result in the exclusion of all evidence related to Lowrie's fraudulent conduct. Instead, it excluded only the minimally probative evidence related to Chill's fraud conviction. MOE's offer of proof included Chill's information and plea agreement for the fraud conviction and a witness who would have testified as to the connection between Chill and Lowry. Although MOE argues that the trial court's ruling prevented it from introducing evidence critical to its defense, the ruling merely prohibited the introduction of a third party's criminal acts. And although one of the trial court's rulings excluded evidence of "any fraud", the offer of proof only involved Chill's fraud, not Lowrie's. When compared to the risk of confusing the jury with evidence of a third party's criminal conviction unrelated to any of the claims at issue in the severed case against Gregg Roofing, we hold that the trial court did not abuse its discretion when it excluded the evidence under ER 403.

b. Harmless Error [29][30] ~ 64 Even if the trial court abused its

discretion by excluding evidence of Chill's fraudulent conduct, any error was harmless. Because MOE was permitted to introduce other, more relevant evidence of Lowrie's misconduct, the evidence specifically related to Chill was

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cumulative. Exclusion of cumulative evidence is not reversible error. Havens v. C & D Plastics, Inc., 124 Wash.2d 158, 169-70, 876 P.2d 435 (1994). "The evidence need not be identical to that which is admitted; instead, harmless error, if error at all, results where evidence is excluded which is, in substance, the same as other evidence which is admitted." Havens. 124 Wash.2d at 170, 876 P.2d 435.

~ 65 MOE argues that the evidence of Chill's fraud conviction and his relationship with Lowrie was important to show that Lowrie was "willfully acting contrary to the best interests of MOE" and that he interfered with the contract for his own benefit. Br. of Appellant at 45 (internal quotation marks omitted). However, at trial, there was testimony elicited by both parties and from multiple witnesses that Lowrie directed the church to hire CPR in exchange for gifts and financial favors from Chill and that Lowrie told the church to fire Gregg Roofing for his own personal benefit. There also was evidence that this behavior was contrary to MOE's interests and against company policy. For example, the vice president of claims for MOE testified that she would have fired Lowrie had she known he was taking money from Chill and CPR because it was a violation of MOE's core values regarding company ethics.

~ 66 We hold that the evidence of Chill's fraud conviction and his relationship with Lowrie was substantively similar to the extensive evidence of Lowrie's fraud and the fact that it was contrary to MOE's interests and policies. Therefore, we hold that even if the trial court abused its discretion by excluding the evidence, any error was harmless because the evidence was cumulative. See Havens, 124 Wash.2d at 170, 876 P.2d 435.

D. CONDITIONAL CROSS APPEAL ~ 67 Gregg Roofing filed a cross appeal in the

event we remand for a new trial. Gregg Roofing argues that the trial court erred in failing to give proposed jury instruction 19, authorizing recovery for injury to reputation on an interference with a


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315P.3dll43 (Cite as: 315 P.3d 1143)

business relationship claim.FNs Gregg Roofing argues that on remand we should order the trial court to accept this proposed instruction.

, 68 Proposed instruction 19 provided, "Damages for tortious interference may include economic loss as well as damages for mental distress, discomfort, inconvenience, injury to reputation, humiliation, and consequential damages. Certainty of proof as to future opportunities and profits is not required." CP at 171-72. The instruction on InJUry to reputation and consequential damages is appropriate, but the trial court did not abuse its discretion in refusing the instruction because it also authorized damages for "mental distress, discomfort, inconvenience [and] humiliation." CP at 172. A business cannot recover these types of "personal" damages for a tortious interference with a business relationship claim. On remand, we direct the trial court to instruct the jury on damages for injury to reputation consistent with this opinion.

, 69 We reverse and remand for a new trial on the issue of damages only.

We concur: PENOY AR, P.J., and SPEARMAN, J.

FN I. MOE did not seek reimbursement for the insurance money fraudulently paid to CPR.

FN2. We need not decide whether to adopt the portion of section 774A providing that emotional distress damages are recoverable in a tortious interference with a business relationship claim. Only Gregg Roofing, not its president Tiffany, is a party to this lawsuit. Gregg Roofing is a corporation, and there is no dispute that corporations cannot recover emotional distress damages.

FN3. The court's holding in Fisons is consistent with earlier cases involving injury to an individual's reputation. See

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Rasor v. Retail Credit Co., 87 Wash.2d 516, 529, 554 P.2d 1041 (1976) (no need for evidence assigning a dollar value to the injury to recover for injury to reputation).

FN4. Gregg Roofing refers us to Porous Media Corp. v. Pall Corp., 173 F.3d 1109, 1122 (8th Cir.l999), where the appellate court upheld a jury verdict for $1.6 mill ion in goodwill damages resulting from false advertising. However, the plaintiff in that case presented evidence that it had lost between $5 million and $10 million in "going-concern" value based on a lost opportunity to create a reputation as the industry leader. Porous Media, 173 F.3d at 1122. Gregg Roofing presented no such evidence of economic harm to its business.

FN 5. Gregg Roofing also argues that the trial court erred in refusing to allow Gregg Roofing to amend its counterclaim to assert a claim against MOE for negligent supervision of Lowrie. However, because we are limiting the new trial to the damages issue, we need not address this issue. MOE's liability will not be at issue on retrial, and there is no indication that a negligent supervisiOn claim allows different damages than an interference with a business relationship claim.

Wash.App. Div. 2,2013. Mutual of Enumclaw Ins. Co. v. Gregg Roofing, Inc. 315 P.3d 1143

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